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(This message was added in version 6.7.0.) in /home4/scienrds/scienceandnerds/wp-includes/functions.php on line 6114Source:https:\/\/techcrunch.com\/2023\/05\/19\/this-austin-accelerator-made-big-claims-employees-and-customers-say-it-didnt-deliver\/<\/a><\/br> Newchip<\/span><\/a>, an online accelerator promising to help startups, has filed for bankruptcy and is now facing insolvency amid employee and client discontent.<\/span><\/p>\n Dozens of employees of the troubled organization staged a walkout on May 4, demanding that founder Andrew Ryan step down as CEO.<\/span><\/p>\n Ryan \u2014 <\/span>who previously went by the name of Ryan Rafols<\/span><\/a> \u2014 started Austin-based Newchip in 2016 after spending more than seven years as a city commissioner in Austin, according to his LinkedIn <\/span>profile<\/span><\/a>.\u00a0<\/span><\/p>\n Newchip initially started out, according to <\/span>Grit Daily<\/span><\/a>, \u201c<\/span>as an aggregator of top deals from various equity-based <\/span>crowdfunding<\/span><\/a> platforms,\u201d<\/span> and later evolved into its current accelerator model. In his LinkedIn profile, Ryan describes Newchip as an entity that provides \u201c<\/span>entrepreneurs with all of the skills and tools necessary to build, scale, and fund their startups from launch to exit\u201d via its \u201conline global accelerator and venture fund.\u201d<\/span><\/p>\n Essentially, Newchip presented itself as an accelerator that would help startups meet and raise money from investors and grow their companies for a fee. But the accelerator failed to deliver on a number of its promises, some employees say, and left hanging founders who had signed up.<\/span><\/p>\n Some founders argued, in interviews with TechCrunch and in at least <\/span>one public post discussion on LinkedIn<\/span><\/a>, that Newchip\u2019s fee \u2014 which varied from a few thousand dollars to up to $18,000 or $20,000 \u2014 was too high and not worth the services provided. Some insisted that it was difficult to impossible to get a refund when the accelerator did not follow through.<\/span><\/p>\n Chief among the long list of complaints by eight former employees who walked out and were interviewed by TechCrunch is \u201cmismanagement\u201d on Ryan\u2019s part. The executive, they claimed, regularly was aggressive toward individuals in the company via written and verbal communications, and made poor decisions regarding leadership roles.\u00a0<\/span><\/p>\n One former employee who wished to remain anonymous told TechCrunch: \u201cHe would routinely often hire either na\u00efve or \u2018yes man\u2019 type employees and get absolutely ruthless and degrading and demeaning to people while saying things like \u2018I\u2019m too good to be wasting my brilliance on this\u2019 and just scream at people.\u201d<\/span><\/p>\n In response as to whether he was demeaning to employees, Ryan acknowledged that his leadership style was<\/span> based on \u201ca military mindset\u201d and that \u201cthere have been moments where the line between accountability and conflict has blurred.\u201d He also admitted that in one particular instance, he could see how his reaction \u201cmight have come across as demeaning.\u201d Ryan also added that he\u2019s been \u201cknown to walk out of or abruptly end meetings lacking an agenda, emphasizing the importance of preparation.\u201d<\/span><\/p>\n In a Zoom interview with TechCrunch and in two different LinkedIn posts (which can be found <\/span>here<\/span><\/a> and <\/span>here<\/span><\/a>), Ryan largely blamed the macro environment, managers and employees for the company\u2019s demise.<\/span><\/p>\n Via email, Ryan said he ultimately accepted \u201cfull responsibility for the events at Newchip.\u201d<\/span><\/p>\n He claimed to currently be \u201cin discussions with numerous VC firms, family offices, and PE firms to formulate a continuity plan.\u201d<\/span><\/p>\n Newchip, operating under Astralabs, filed for Chapter 11 bankruptcy in March, revealing that it had just $1.7 million in assets compared to $4.8 million in liabilities. Last week, a bankruptcy judge ended up converting the case to Chapter 7 liquidation. This is unsurprising, considering that, according to <\/span>Grit Daily<\/span><\/a>: \u201c<\/span>While Newchip raised $7.9 million from accredited and nonaccredited investors, Crunchbase data reveals a troubling history of financial losses. SEC filings show a net loss of $197,884 for 2016, a $748,999 loss in 2017, and the company claimed $4.5 million in tax loss carryforwards in its 2020 financial statements.\u201d<\/span><\/p>\n Ryan claimed the employees staged the recent walkout to protest the fact that the company was going to be laying off more employees, and were led by a Newchip investor. While Ryan did not name the investor, that individual is believed to be Joe Merrill, who also served as chief of Newchip\u2019s board. (TechCrunch reached out to Merrill but he did not respond to requests for comment.) Ryan added that the accelerator had already conducted several rounds of layoffs over the previous six months, going from more than 200 employees to about 75 at the beginning of this month.<\/span><\/p>\n Speaking to TechCrunch, Ryan said: \u201cWe had to make cuts across the team and there was gonna be massive layoffs [\u2026] Otherwise there would be no money to pay people and we had to cut the business down. And while I requested approval from the court to take on capital and we had investors ready to give us capital, our attorneys had failed to file the motion. And so we basically pushed them to file for [an] emergency filing.\u201d<\/span><\/p>\n He claimed that employees were not happy with that move and demanded that he \u201cwind the company down and basically liquidate everything,\u201d which he said he could not do while in Chapter 11 proceedings. Ryan said he went on to terminate the board.<\/span><\/p>\n For their part, the eight former employees TechCrunch spoke with deny walking out due to potentially being laid off or not getting paid and instead cite <\/span>Ryan\u2019s \u201clack of leadership and mismanagement.\u201d<\/span><\/p>\n In their walkout letter (which was shared with TechCrunch), the employees wrote of their concerns over the dismissals of \u201ckey personnel,\u201d saying their \u201cremoval has led to an erosion of trust and morale within the organization, creating a toxic work environment.\u201d The employees demanded the execs be reinstated and that Ryan step down as CEO \u201ceffective immediately.\u201d\u00a0<\/span><\/p>\n No one was reinstated.<\/span><\/p>\n Via email, Ryan told TechCrunch: \u201cIn the end, we were unfortunately compelled to close the company despite having secured capital commitments to keep it moving forward due to the takeover attempt and false allegations made to the court that we could be liquidated for half a billion dollars if the court just signed off, which understandably led to frustration right now and a lot of our 1,200 active companies are rightfully upset. I empathize deeply with everyone affected and am taking every possible measure to rectify the situation.\u201d<\/span><\/p>\n He also said the company would \u201cbe bringing in a new, more experienced CEO.\u201d<\/span><\/p>\n It isn\u2019t just employees who say they were burned by Newchip. Andrew Goei, founder of PitchPages, a pitch deck and fundraising software startup, said he wanted a refund a few months into the program after he felt he was not getting the promised services, specifically the investor intros.\u00a0<\/span><\/p>\n In an interview with TechCrunch, Goei recalled Newchip\u2019s salespeople telling him the accelerator \u201chas this huge network and can introduce us to all these investors.\u201d PitchPages would pay $8,000, and if the company didn\u2019t get successful funding, the company would get its money back, Goei said. So his company signed up in August of that year.<\/span><\/p>\n \u201cAbout two or three weeks into it, we still had no communication from them at all, even though we paid,\u201d Goei said. At that point, PitchPages had paid about $6,000 to the program.<\/span><\/p>\n During that time, Goei said he met two mentors from the program who voiced concerns about Newchip and recommended Goei get a refund. Weeks would go by before customer support people would respond, and ultimately he was told there would be no refund, Goei told us.\u00a0<\/span><\/p>\n \u201cIt was very apparent that their whole model was \u2018get as many startups as we can. We don\u2019t care who they are. We don\u2019t care what stage they\u2019re in as long as they pay, that\u2019s all that matters,\u2019\u201d Goei said. \u201cAnd they would find any way possible and not give any refunds. What\u00a0 was really sad about the whole thing is that Newchip was started by this guy who comes from the VC community.\u201d\u00a0<\/span><\/p>\n Founder <\/span>Orri Bogdan, too, told TechCrunch that Newchip\u2019s salespeople told him that <\/span>they would offer a full refund if he failed to raise funding through the outfit, but then \u201csnuck in extreme stipulations with the intention of never refunding anyone.\u201d\u00a0<\/span><\/p>\n
\nThis Austin accelerator made big claims; employees and customers say it didn\u2019t deliver<\/br>
\n2023-05-19 21:41:23<\/br><\/p>\nFeeling misled<\/strong><\/h2>\n